Payers Race to Modernize Claims Review as Alaffia Health Raises $55M
Providers are moving fast on AI. That's forcing health plans to speed up their own use of administrative AI, especially in claims review, where complexity and volume keep climbing.
On Tuesday, New York-based Alaffia Health announced a $55 million Series B led by Transformation Capital, bringing total funding to $73 million since its 2020 launch. Other investors include FirstMark Capital, Tau Ventures and Twine Ventures.
The company's focus is straightforward: help health plans cut waste by making claims review faster, more consistent and easier to defend, according to CEO TJ Ademiluyi.
What Alaffia Does
Many claims are still reviewed manually and inconsistently, often without full clinical context. That leads to overpayments, slow turnarounds, strained provider relationships and higher regulatory risk.
"At a high level, Alaffia pairs experienced clinicians with agentic AI that understands the full breadth of claims and their supporting clinical information, including the patient medical record - data that is often unstructured, siloed and overlooked," Ademiluyi said.
The platform extracts key clinical facts from medical records and documentation, then compares those facts to how the claim was billed. It checks alignment with health plan reimbursement policies and clinical guidelines. The AI synthesizes complex data and surfaces clear findings; "Clinicians remain at the helm, reviewing the AI's outputs and making the final determination," he added.
Who They Compete With - And Why It Matters
Alaffia is targeting regional and national health plans. The company competes with legacy payment integrity vendors that rely heavily on manual processes and with newer AI-only automation tools that may move quickly but struggle with explainability, configurability and regulatory trust.
Alaffia's pitch centers on transparency and clinical oversight, with a platform built for payer operations and current compliance expectations. As Ademiluyi put it, "This balance allows Alaffia to deliver meaningful savings without increasing compliance or provider-relations risk."
Practical Considerations for Health Plan Leaders
- Data coverage: Can the tool ingest and interpret medical records, attachments and prior auth data alongside claim lines and edits?
- Explainability and auditability: Are findings traceable to evidence, policies and clinical guidelines? How are audit trails maintained?
- Clinical oversight: How are clinicians integrated into the workflow? Who signs off on determinations?
- Policy configurability: Can you adapt rules to plan-specific policies, benefits and local coverage decisions without vendor tickets every time?
- Compliance alignment: How does the solution support program integrity requirements and appeals processes? See CMS resources on payment integrity for context here and OIG's work on improper payments here.
- Provider relations: Does the output make it easy to share rationale, reduce abrasion and speed resolution of disputes?
- Integration: How well does it connect with your core admin platform, SIU, UM, and payment integrity stack?
- KPIs: Track accuracy uplift, overturn rate, savings per claim, cycle time, provider abrasion and regulatory findings.
- Change management: Upskill teams on AI-assisted review and policy ops. If you need training options by job function, browse this curated catalog here.
The Market Signal
Will clinician-in-the-loop administrative AI become the standard? Too early to call, but investor interest says payers want solutions that balance speed with defensibility.
If you're evaluating vendors, ask for proof: audited savings, accuracy benchmarks, explainability samples, and results from live payer deployments. Pilot in a contained line of business, measure outcomes tightly and expand based on evidence.
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